Question

4. (0) For each of the following utility function, derive the marginal utility (MU) of X1, MU of X2, and marginal rate of substitution (MRS), respectively. (a) U (X:, X2) = x, 13 x 2/3 (Cobb-Douglas) (b) U (xs, Xa) = 3 x + 7 x2+ 10 (Perfect substitutes) (C) U (X1, X2) = min{2 X1, 3 xz) (Perfect complements) (ii) For each of the utility functions above, derive the respective demand function. 15. Betty has a unique preference over two goods. She must consume them in fixed ratio

Hi, please help me solve b for the ii) part. I mean derive demand function for b.

Answer 1

ii) part b

U (2, R₂): 32,77X₂410 MRS? MUN 3 i if MRS P 22 then consumer will furchase only good & x, 2 m . then consumer will buy only good x2. i, if MRS LP, in il MRS2 l the entire ludoget line is the answer (any number from to to mp)

am P. MRS MRsh P2 P2 92 Burlesung Budget line MRS > P1/P2 - indiffereme wewe budget line САМА solution. ble only x ² m MRS LP/ conta ood x 22 m / 12 only go am/l solution

U (2, R₂): 32,77X₂410 MRS? MUN 3 i if MRS P 22 then consumer will furchase only good & x, 2 m . then consumer will buy only good x2. i, if MRS LP, in il MRS2 l the entire ludoget line is the answer (any number from to to mp)